How public agencies can reduce change orders

Most agencies treat change orders as an unavoidable cost of construction. A meaningful share of them are avoidable, and the avoidable share is concentrated in decisions made before the project was ever advertised.

Run a constructability review on the bid documents. Not a plan check, which confirms code compliance, but a review that reads the drawings the way a bidding contractor will read them. Most change orders originate in missing information, inconsistent information, or inaccurate information, and all three are visible in review. The cost of a review is a small fraction of one percent of construction value. See constructability review.

Verify the existing utility information. Record drawings in developed corridors are frequently wrong. Potholing critical crossings before advertisement converts an unknown into a dimension on a drawing, and it eliminates one of the most reliable sources of differing site condition claims.

Make the geotechnical information adequate and available. Insufficient subsurface investigation transfers risk to bidders, who price it as contingency if they are careful and as a claim if they are not. Either outcome costs the agency more than the borings would have.

Validate the engineer's estimate independently. An estimate produced by the designer carries an inherent tension. An independent check before advertisement tells the agency whether the budget is real and whether bids should be expected above it.

Write a real schedule specification. Define the submission format, update frequency, activity coding, float ownership, and the delay analysis methodology. This costs nothing at the document stage and resolves a category of dispute before it can arise. See CPM scheduling.

Analyze the bid spread, not just the low bid. A low bid substantially below the others and below the engineer's estimate is information. Something was likely missed or a claim strategy is anticipated. That is worth understanding before award, not after.

Check unit price balancing. Front loaded unit prices on early items and low prices on items likely to increase in quantity are a well established technique. It is detectable in the bid tabulation and correctable through the responsiveness analysis.

Confirm the schedule is achievable. A contractor who bids a duration that cannot be met will need a time extension, and the entitlement fight will begin in month three.

Require entitlement before pricing. The first question on any change request is whether the contract entitles the contractor to anything at all. Agencies that go straight to price negotiation pay for changes they did not owe.

Document field conditions contemporaneously. Differing site conditions have to be documented when they are exposed, because the evidence is covered within days. A photograph and a measurement at the moment of discovery is worth more than any amount of later argument.

Verify installed quantities. On unit price contracts, final cost is determined by measurement. Agencies that accept the contractor's quantities without independent verification pay for material that was never placed.

Track float consumption. A contractor consuming float in early activities is building a time extension claim for later. Monthly schedule review catches it while it is still correctable.

Resolve at the field level. A change resolved by the resident engineer and the superintendent costs a fraction of one resolved by counsel. Delegating authority appropriately, within board approved thresholds, is one of the highest return administrative decisions an agency can make.

Agencies with low change order rates are not lucky. They invest in document quality before advertisement, they staff construction administration properly, and they enforce the contract consistently rather than episodically.

The investment is modest and the arithmetic is favorable. A constructability review, a utility investigation, and an independent estimate together typically cost well under one percent of construction value. Change orders on a poorly prepared public works project routinely exceed ten percent.

See public works construction management or contact us to discuss a specific project.